BSA claims huge losses to software pirates

Software piracy in the Asia-Pacific region continued to worsen last year, an industry study claimed on Tuesday, driven by the rapid growth in computer sales and the availability of bootleg programs online.

The annual survey by the Business Software Alliance (BSA) and industry research firm IDC showed that in 2008, an average of 61 per cent of the region's software were unlicensed.

The figure was up from 59 per cent the previous year.

This led legal software vendors to lose US$15.26 billion, up 8.3 per cent from $14.09 billion the previous year, according to the study.

The global average of unlicensed software worsened to 41 per cent in 2008 from 38 per cent the previous year, causing losses of almost $53 billion, the study said.

The BSA report will put further heat on the government, which was groping last week for an anti-piracy policy after Thailand landed on the list of the "dirty dozen" worst intellectual property thieves compiled by the US State Department.

A showpiece raid on pirates on Patpong Road in downtown Bangkok turned in a violent farce, and vendors of pirated goods including software have won public and official sympathy in their pleas to be treated more gently.

The BSA routinely describes piracy of software as "theft" and it placed Thailand as Number 17 among the world's top thieves.

The report said software piracy was worst in the United States, where pirates took $9.1 billion from legal outlets. China ($6.7 billion), Russia ($4.2 billion), and India and France ($2.8 billion) rounded out the Top Five.

According to BSA, a full 76 per cent of all computer software in Thailand in 2008 was pirated, a drop of two per cent from 2007. But BSA's accountants figured that the losses by legitimate software companies to Thai pirates rose from $468 million in 2007 to $609 last year.

The figures were not explained, but presumably reflected increased use of software by more users, as well as price increases by the BSA clients.

Globally, the problem may worsen this year as the financial crisis forces consumers to hold back on new purchases, the study added.

"The economic crisis is likely to have a bigger effect on software piracy in 2009," it said.

"Since consumers are more likely to hold on to their PCs longer, this may result in increased software piracy because older computers are more likely to have unlicensed software."

Jeffrey Hardee, BSA's vice president and regional director, said last year's increase in software piracy rate was due to the rapid growth in computer sales.

"Even if piracy were to go down in every high-piracy country, their growing market share for PCs could drive the regional average up," he said.

Widespread use of the Internet was another factor behind the increase, according to the study.

"The availability of pirated software on the Internet, which ironically is facilitated by increasing broadband penetration in the region, is also a major concern," said Hardee.

Software includes operating systems, systems software like databases and security packages and application software like office packages, finance and tax packages and PC computer games.

Bangladesh was the biggest culprit in the Asia-Pacific last year with a piracy rate of 92 per cent, followed by Sri Lanka at 90 per cent and Pakistan at 86 per cent, the study showed.

Japan had the lowest rate, at 21 per cent, followed by New Zealand at 22 per cent and Australia at 26 per cent.

In China, the average piracy rate dropped to 80 per cent last year from 82 per cent in 2007, the study showed.

The improvement in China is due to "more vigorous enforcement and education," it said.

Central and eastern Europe had the world's highest software piracy rate last year with an average 66 per cent, followed by Latin America at 65 per cent, with the Asia-Pacific coming in third, the study said.

The Middle East/Africa region had a piracy rate of 59 per cent and Western Europe had 33 per cent. North America had the lowest software piracy rate at 21 per cent.

NOTE: The report is available from the BSA website www.bsa.org.